Opinion
600626/06.
Decided August 8, 2006.
Attorneys for Plaintiff Certain Underwriters at Lloyds, London, Tannenbaum Helpern Syracuse Hirschtritt, LLP, New York, New York.
Att: Jamie B.W. Stecher, Esq., and Zuckerman Spaeder LLP, Washington, DC.
By: Carl S. Kravitz, Esq., Graeme W. Bush, Esq., James Sottile, Esq. Carlos T. Angulo, Esq., Attorneys for Defendants Employers Insurance of Wausau, Dorsey Whitney LLP, New York, New York.
By: Patrick J. Feeley, Esq., Charisa S. Tak, Esq., Attorneys for Defendant Lumbermens Mutual Casualty Company, and American Motorists Insurance Company, Tressler, Soderstrom, Maloney Priess, New York, New York.
By: Theresa E. Mullen, Esq., Attorneys for Defendants Millennium Holdings LLC, Millennium, Chemicals Inc., and Millennium Inorganic Chemicals, Inc., Stewart Occhipinti, LLP, New York, New York.
By: Frank S. Occhipinti, Esq., and Gilbert Heintz Randolph LLP, Washington, DC.
By: John E. Heintz, Esq., Richard D. Milone, Esq., Barry I., Buchman, Esq., Justin F. Lavella, Esq., Elissa O. Tomanda, Esq., Attorneys for Defendant NL Industries, Inc., Dickstein Shapiro Morin Oshinsky LLP, Washington, DC.
Att: Leon B. Kellner, Esq., Michael T. Sharkey, Esq., Paul, R. Lucey, Esq., Erica J. Dominitz, Esq., Attorneys for Defendant The Glidden Company, Anderson Kill Olick, P.C., New York, New York.
By: William G. Passannante, Esq. and Cort T. Malone, Esq., Attorneys for Defendants American Home Assurance Company, American International Underwriters Insurance Company, Birmingham, Fire Insurance Company, Granite State Insurance Company, Insurance, Company of the State of Pennsylvania, Landmark Insurance Company, Lexington Insurance Company, National Union Fire Insurance, Company of Pittsburgh, Pa., and New Hampshire Insurance Company, Simpson Thacher Bartlett, New York, New York.
By: Barry R. Ostrager, Esq., Bryce L. Friedman, Esq., Michael, D. Kibler, Esq., Attorneys for Defendants TIG Insurance Company (for itself and as successor by merger to International Surplus Lines Insurance Company), North River Insurance Company, and United States Fire Insurance Company, New York, New York.
By: Aidan McCormack, Esq. and Cyril Smith, Esq., Attorneys for Defendants Hartford Accident and Indemnity Company, First State Insurance Company, Twin City Fire Insurance Company, New England Insurance Company, and Nutmeg Insurance Company, Hogan Hartson L.L.P., New York, New York.
By: Tracey A. Tiska, Esq. and M. Gavan Montague, Esq., and Hogan Hartson LLP, Washington, D.C. By: William J. Bowman, Esq., James P. Ruggeri, Esq. and George W. Mayo, Jr., Esq., Attorneys for Defendant Allstate Insurance Company Rivkin Radler, LLP, Uniondale, New York.
Att: Lawrence A. Levy, Esq. and John T. Seybert, Esq., and Aronberg Goldgehn Davis Garmisa, Chicago, Illinois, By: Mitchell Goldgehn, Esq. Howard Fishman, Esq. Lisa J. Brodsky, Esq., Attorneys for Defendant The Sherwin-Williams Company, Jones Day New York, New York, By: Thomas H. Sear, Esq.
Motions sequence 005, 006, 007, 008, 013 and 014 are consolidated for disposition.
In this action, plaintiffs, Certain Underwriters at Lloyds, London ("Certain Underwriters"), are individual underwriting names organized as underwriting syndicates that do business at Lloyds in London. They subscribed to certain liability insurance policies in favor of each of the policyholder defendants. Policyholder defendants include Millennium Chemicals Inc., Millennium Holdings LLC, Millennium Inorganic Chemicals Inc. (collectively "Millennium" or "Millennium defendants"), the Sherwin-Williams Company ("Sherwin-Williams"), The Glidden Company ("Glidden"), and NL Industries Inc. ("NL"). Nominal defendants are other insurers aligned in interest with plaintiffs.
Plaintiffs seeks a declaratory judgment to determine their obligations to indemnify the policy holder defendants, for losses arising from a Rhode Island law suit that went to trial in October 2005, State of Rhode Island v. Atlantic Richfield, et al. C.A. No. 99-5226(Superior Ct. R.I. Providence). In that case, a jury returned a verdict in favor of the State of Rhode Island against various defendants including Sherwin-Williams, the Millenium defendants, and NL, on the theory of Public Nuisance. The jury stated that these defendants are liable for and must abate the nuisance (lead paint). Plaintiffs have stated their claims more broadly, however, seeking a declaration concerning their obligations to indemnify for (1) lead pigment or lead paint public nuisance claims brought against policy-holder defendants in Rhode Island, (2) any other lead pigment or paint public nuisance claims, or (3) any other lead pigment or paint case involving similar claims or requests for relief including abatement of lead paint in buildings or personal injury claims (collectively, "lead losses"). The latter claims are involved in law suits brought by the City of New York, the City of St. Louis, the City of Milwaukee, the County of Santa Clara, and various New Jersey municipalities. The jurisdictional basis for bringing this law suit in New York is that some of the policies issued by some of the nominal defendants (the other insurers) were allegedly contracted for and issued in New York.
The issue of indemnity coverage has risen to the fore because of the Rhode Island verdict but issues concerning these plaintiffs' liability for defense costs were previously resolved in other cases that will be discussed below. In the law suits here, plaintiff insurers raise a substantial number of issues concerning the policy holder defendants' knowledge about the dangers of lead paint and their concomitant failure to disclose risks to their insurers as well as allocation of liability among the plaintiffs, policyholder defendants, and other insurers relating to indemnification in the Rhode Island litigation and in the law suits brought by other cities.
Various defendants move to dismiss the claims against them here on the bases of CPLR §§ 327, 3001, and 3211(a)(4). The defendants move pursuant to CPLR § 3211(a)(4) because there are actions pending in other jurisdictions and pursuant to CPLR § 327 claiming that New York is not otherwise the proper or convenient jurisdiction for resolving these claims. In motion sequence 005, Millenium defendants move to dismiss or stay this action, in motion sequence 006 defendant Sherwin-Williams moves to dismiss or stay this action, in motion sequence 007, defendant Glidden moves to dismiss this action, and in motion sequence 008 defendant NL moves to dismiss or stay this action. Various insurer defendants cross-move in these cases seeking to have New York retain jurisdiction primarily on the basis that New York is the "center of gravity" for many of the policies and that all coverage issues for nuisance claims should be resolved in a single forum. In motions sequence 013 and 014, defendants Millennium and Sherwin Williams, respectively, move to dismiss cross claims by Travelers Casualty and Surety Company and the Travelers Indemnity Company and the The Travelers Companies joined by the AIG companies oppose those motions on the ground that they are excess insurers who entered into policy agreements in New York. Each motion will be addressed separately.
Glidden
In motion sequence 007, defendant Glidden moves to dismiss based upon the Court's discretion not to exercise jurisdiction where, as here, a pre-existing action is already pending. Glidden, a Delaware Corporation with its principal place of business in Ohio, is not a defendant in the Rhode Island action, having been dismissed long before any verdict was entered. Glidden claims that the parties have been litigating in Ohio since 1991 and that the same coverage issues that were before the Court in that case, The Glidden Company and HM Holdings, Inc., as successor in interest to SCM Corporation v. Lumbermens Mutual Casualty Co. et al., No. 215106 (Cuyahoga County Court of Common Pleas, 1991), are now before the Ohio Supreme Court. In the 1991 case, Glidden sought a declaratory judgment as to the obligations of various insurance companies under comprehensive general liability insurance policies to defend and indemnify SCM and Glidden for various claims in a case called City of Philadelphia v. Lead Industries Association, Inc. et al., 90-7064 (E.D.P.A.). Partial summary judgment was granted to Glidden and the parties then entered into an Interim Defense Agreement providing for payment of defense costs relating to the Philadelphia and other cases. The settlement involved coverage of defense of Glidden and/or it predecessor SCM. It did not deal with indemnification inasmuch as there were as yet no verdicts pending and it was premature to decide issues concerning coverage for indemnification.
A subsequent action was commenced on June 2, 2000, this time for indemnity coverage. That case, The Glidden Company v. Lumbermens Mutual Casualty Company, et al., Case No. 409039, has been pending in the Court of Common Pleas in Cuyahoga County for over five years. Glidden contends that that law suit is more comprehensive than the one here and covers all of the issues sought to be litigated here. Glidden further avers that it filed a First Amended Complaint in the current Ohio action commenced in 2000 and a Second Amended Complaint in 2001 and the action was assigned to Hon. Frank D. Celebrezze, Jr., the same judge who presided over the prior 1991 Ohio action because it was deemed to be a related case. Judge James Porter is now presiding over these cases. The Ohio court has already stated that Ohio law applies to these policies, and it appears that no one in this litigation has significant ties to New York.
Glidden avers that the federal court for the Southern District of New York a rejected a prior attempt by insurance companies to sue Glidden on the ground that there were existing actions in Ohio dealing with the same subject matter. American Motorists Ins. Co., et al. v. The Glidden Co., et al., 00 Civ. 3787, 129 F.Supp.2d 640 (S.D.NY 2001).
Millennium Defendants
In motion sequence 005, Millennium defendants move for summary judgment dismissing the case against them, also pursuant to CPLR 3211(a)(4) and 327 as well as CPLR 3001. Millennium defendants rely in large part on the same arguments that Glidden proffered. Although Millennium defendants were implicated in the Rhode Island verdict, it appears that Glidden (Ohio) may have been a predecessor to Millennium Holdings. The London Underwriters' policies at issue here were sold to the former Ohio Corporation, the Glidden Company. After many of the policy periods of London Underwriters' had ended, Glidden (Ohio) merged into a former New York corporation, SCM Corporation in 1967. Following the 1967 merger, and up through 1976, Glidden (Ohio)'s paint business were operated as the Glidden-Durkee Division of SCM, then the Coatings and Resins Division of SCM until 1986. In 1986, the paints business was sold off from SCM to another company, which ultimately became defendant Glidden Paints. The underlying lead paint cases name Millennium Holdings, Millennium Inorganic Chemicals, and Millennium Chemicals as well as Glidden Paints for injury arising out of the operations of Glidden (Ohio) and Glidden-Durkee Division of SCM. Most of the London policies were issued to Glidden (Ohio) before its merger with SCM and the rest were issued to the Glidden-Durkee Division of SCM. All primary policies were delivered to the named insured's address in Cleveland Ohio.
In 1991, in response to the first law suit brought by a governmental entity (Philadelphia), coverage cases were brought in Ohio to determine the insurers' duty to defend. As stated in the Glidden motion, the matter was resolved in 1993 by partial summary judgment and stipulation by the Ohio Court of Common Pleas, and interim reimbursement agreements affecting Glidden and Millennium defendants were reached in 1995. When a new wave of cases were filed in 1999, the interim agreements were terminated, Millennium defendants and Glidden sought rulings in the Ohio Court of Common Pleas. The London insurers sought a ruling in the federal court, Southern District of New York. Hon. Jed Rakoff rejected jurisdiction, stating that the Ohio state court was "the court best suited in every relevant respect to decide the issues in this case . . . the Ohio state judge, who not only has considerable prior familiarity with the legal issues and factual background of this matter but also has pending before him a far more comprehensive case involving all pertinent parties." ( American Motorists v. Glidden Co., 129 F. Supp 2d 641). In April 2001, the Glidden and Millennium defendants successfully moved to consolidate the cases in Ohio. Various rulings have already been obtained in the Ohio action with respect to coverage for defense and remediation. The Ohio Court of Common Pleas initially rejected Glidden's bid for coverage under the pre-1986 Glidden (Ohio) and SCM primary policies that insure Millennium Holdings but that determination was reversed on appeal in 2004 ( Glidden Co. v. Lumbermens Mutual Casualty Co., No. 81782 (Ohio App. 2004)) and further appeal is pending before the Supreme Court of Ohio(No. 2005-0293, 828 NE2d 115 (2005)). The Appeals Court stated that Ohio governs all of those policies. Although Millennium has settled with some insurer in the Ohio action, Glidden is still a party as are some insurers.
Millennium argues, as do other companies, that based on the convenience of the parties, that is the presence of the vast majority of historical corporate documents and witnesses in Ohio, the prior determination that Ohio law applies, and the prior litigation that has gone on and is ongoing in Ohio, the Cuyahoga County Court of Common Pleas is the appropriate venue for these coverage actions. It also argues that consistency of decisions will be fostered by the Ohio Court's retaining jurisdiction inasmuch as it is familiar with the issues, and has already made significant determinations relating to application of laws. Finally, the paints business of Glidden (Ohio) and later of the various Divisions of SCM were in Ohio, Millennium Inorganic Chemicals maintains its plant operations in Ohio and Certain Underwriters' policies were issued in Ohio.
Sherwin-Williams
Defendant Sherwin-Williams also moves for dismissal or alternatively for a stay pursuant to CPLR 2201 in motion sequence 006. First, Sherwin-Williams argues that its principal place of business is in Ohio and has been for 140 years, all of the insurance policies were negotiated and issued in Ohio, and Ohio law applies. Four separate cases have already been litigated concerning these very policies applying Ohio law based on Certain Underwriters' assertion that Ohio law was appropriate. Sherwin-Williams claims that for Certain Underwriters to argue here that law other than Ohio law applies would be to take a position contrary to the one it took in those cases. Sherwin-Williams cites Lanzano v. City of New York, 202 AD2d 378 (1st Dept. 1994) for the proposition that a party may not frame pleadings in a manner inconsistent with a position taken in previous proceedings, and Karasik v. Bird, 104 AD2d 758, 480 NYS2d 491 (1st Dept. 1984) holding that a party who assumes a certain position in a legal proceeding may not assume a contrary one in a later proceeding. One of those four cases, Sherwin-Williams Company v. Certain Underwriters at Lloyds, London and the LondonMarket Insurance Companies, (N.D. Ohio, 1993) involved the same policies at issue here, and plaintiffs and defendants settled that dispute. As part of the settlement, Sherwin-Williams was awarded summary judgment pursuant to Ohio law, and reimbursement payments for defense costs were made in Ohio.
Moreover, Sherwin-Williams avers that in the various negotiations that have occurred over the years concerning defense costs, Equitas Limited (a British entity) handled claims pursuant to the Defense Cost Agreement and made all payments made to Sherwin-Williams were made in Ohio. Sherwin-Williams avers that it was in the process of negotiating or settling with Equitas concerning liability for payments in the Rhode Island case in Ohio.
Second, Sherwin-Williams contends that it has filed a law suit in Ohio seeking indemnity coverage in connection with the Rhode Island case and other similar cases. ( Sherwin-Williams v. Certain Underwriters et al., Case No. 06 585786). While acknowledging that its Ohio action was filed eight days after the New York action, Sherwin-Williams claims that winning the race to the courthouse should not be the basis for New York to retain jurisdiction. It also argues that the Ohio state court action, also in Cuyahoga County, is more comprehensive and names, inter alia Equitas, as a defendant.
Third, Sherwin-Williams contends that there is no nexus to New York in any of the claims asserted here in that Certain Underwriters has not shown that any of the Lloyds syndicates is a resident of the United States or New York. While five of the other insurance company defendants are New York residents, a mega case with many different policyholders including Sherwin-Williams and its insurers, Millenium/Glidden, and their insurers and NL Industries and its insurers will result in confusion and unnecessarily burden the New York court. The facts as to the underwriting and brokering of each line of coverage are specific to each policyholder and manufacturer and what each knew and represented to Lloyds underwriters as well as what each knew when manufacturing the paint and lead pigment are presumably distinct.
Finally, Sherwin-Williams claims that litigating in New York would be inconvenient because there are at least 460 insurance policies issued to Sherwin-Williams in Ohio, many claims have already been settled in Ohio, witnesses are for the most part located in Ohio, documents are in Ohio and Ohio law unquestionably applies.
NL
In motion sequence 008, defendant NL industries moves pursuant to CPLR 3211(a)(4) and CPLR 3001 to dismiss this action against it or alternatively for a stay pursuant to CPLR 2201. NL avers that there is a more comprehensive litigation pending in Texas involving these same parties and issues which would address NL's coverage disputes with it insurance companies. NL claims that Certain Underwriters misled NL by purporting to engage in settlement talks concerning its liability coverage through its representative Equitas while intending to file this action in New York before it could file an expanded action in Texas. NL had previously filed a limited action NL Industries, Inc. v. One Beacon America Ins. Co., No. 3:05-CV-2264 (N.D. Texas Nov. 8, 2005), also concerning some underlying issues relating to coverage for lead paint claims. NL filed a second action in Texas state court on April 5, 2006 which forms the basis for this stay application. NL cites White Light Productions, Inc. V. On the Scene Productions, Inc., 231 AD2d 90, 660 NYS2d 568 (1st Dept 1997) for the proposition that a first-filed action can be dismissed under CPLR 3211(a)(4) if a party has engaged in inequitable forum shopping, including filing an action while purporting to schedule settlement discussions.
NL also contends that participating in so massive an action as the one set forth in this complaint in New York would be unwieldy inasmuch as separate insurers and syndicates sold policies to various defendants.
In regard to the NL motion, OneBeacon America Ins. Co. submits a brief opposing NL's application because it also brought an action in this court to determine coverage issues which this very court has already declined to dismiss, OneBeacon America Ins. Co v. NL Inc. et al., Index No. 603429 (NY Co 2006).
Certain Underwriters
Certain Underwriters in its supplemental complaint acknowledges that this case was filed specifically in response to the Rhode Island state court law suit verdict involving paint companies other than Glidden and asserts that the jury verdict in Rhode Island creates new and distinctive indemnity issues.As previously indicated, in that case, the jury returned a verdict against Millennium Holdings, NL Industries Inc., and the Sherwin-Williams Company on the theory of public nuisance. The issue that Certain Underwriters claims that is ripe for decision here is the narrow one of coverage for losses stemming from such public nuisance liability. The Rhode Island jury found that (1) the cumulative presence of lead pigment in paints and coatings on building throughout the State of Rhode Island constitutes public nuisance; (2) that these defendants caused or substantially contributed to the creation of the public nuisance; and (3) that these defendants should be ordered to abate the public nuisance. There were no specific cost findings. Certain Underwriters avers that in an effort to resolve this question comprehensively, efficiently, and consistently as to all defendants, Certain Underwriters included in this action each defendant held liable in the Rhode Island case, as well as certain other entities, including insurers that issued policies in New York, that claim rights under the policies at issue.
Opposition and Cross Claims
Allstate Insurance Company, as successor to Northbrook Excess Surplus Insurance Company asserts cross-claims against Millennium defendants, NL, Glidden and Sherwin-Williams, although not adopting all of Certain Underwriters' arguments, avers that New York is the proper forum to determine indemnity coverage claims growing out of the Rhode Island jury verdict. Similarly, defendant TIG Insurance Company, successor by merger to International Insurance Company, opposes the motions to dismiss on the ground that policies issued to SCM Corporation were issued through a New York insurance broker and that TIG was dismissed as a party in Glidden's Ohio coverage action and has never been a party in the Millennium coverage action. The Ohio trial court determined that Glidden was not a successor in interest to SCM, causing it to dismiss claims against TIG. TIG also contends that Millennium's Ohio action currently only involves primary insurers and that it is not a primary insurer.
AIG also joins the opposition to Glidden's and Millennium defendants motion to dismiss on the ground that all of its policies were negotiated, brokered and underwritten in New York and that AIG has been dismissed in the Glidden action in Ohio and the Millennium action has been dormant. Granite State Insurance Company (the AIG company in the Millennium action) has not even answered the Complaint.
Finally, defendants Hartford Accident and Indemnity Company, First State Insurance Company, Twin City Fire Insurance Company, New England Insurance Company, and Nutmeg Insurance Company (collectively, "Hartford"), as excess insurers, also oppose Glidden's and the Millennium defendants' motions to dismiss on the ground that the action here is more comprehensive than the Millennium and Glidden consolidated coverage actions pending in Ohio. They contend that New York is the center of gravity for the insurance relationships at issue in that most of the policies were issued in New York and many are governed by New York law. They, like AIG companies, argue that little or no activity has transpired in the Ohio matters, rather settlement discussions and dismissals have been the ongoing pattern. Also, they claim Ohio actions dealt with defense and not indemnity issues.
Motions to dismiss Cross-claims
In motions sequence 013 and 014, Millennium defendants and Glidden seek to dismiss the cross-claims against Travelers Casualty and Surety Company and the Travelers Indemnity Company ("Travelers"), also in favor of the Ohio action. These motions were made in response to a letter from counsel for Travelers and AIG defendants who have cross-claimed in this action against the policy holders. The letter sought clarification of this court's tentative ruling on April 27th 2006 which indicated an inclination to dismiss Certain Underwriters declaratory judgment action against Glidden, the Millennium defendants and Sherwin-Williams but did not deal specifically with the cross-claims. While Glidden and Millennium aver that the Ohio action is sufficiently comprehensive and is moving forward under Hon. James Porter, Travelers (and AIG) contend that they are not even parties to that Ohio litigation. They also contend that the insurance policies in which they were involved (those issued to SCM) were brokered in New York, and it was always anticipated that New York law would apply. Finally, they claim that their cross-claims against Millennium and Glidden defendants are in part referable to a 1998 settlement agreement.
Although it appears that Travelers and AIG were not parties to any pending Ohio litigation, on April 26, 2006, Hon. James Porter granted a motion to amend the Millennium v. Lumberman's Mutual action . However, it is unclear whether that amendment or any previous action encompassed the cross-claims made here.
Discussion
After oral argument, this Court stated on the record that Certain Underwriters' indemnity coverage actions against Glidden, Sherwin-Williams, and the Millennium defendants relating to Certain Underwriters' obligations based on the Rhode Island verdict would be dismissed pursuant to CPLR 3211(a)(4) because the Ohio court has been dealing with these companies' claims for both defense and indemnification in relation to lead paint and pigment actions for some years. Although the insurers argue alternatively that the Ohio action is more comprehensive or less comprehensive or less focused than the issues sought to be resolved here, it is clear that Ohio Common Pleas Court has dealt with interpreting the specific provisions of insurance policies issued by Certain Underwriters and others. While plaintiffs and co-defendants (cross-claimant) contend the Ohio actions have been dormant because of settlements and various interim agreements, there is no reason that they cannot be revived; in fact, they appear to have been. On April 26, 2006, Hon. James Porter granted Millennium's motion to file a Fourth Amended Complaint in Millennium v. Lumbermens Mutual Casualty, Case No. 411388, noting that it had already been determined that Ohio law applied to disputes at issue and that it was London's (Certain Underwriters') filing of the case in New York that was the source of confusion.
While the fact that the cases were first filed in Ohio, and Ohio courts have retained continuing jurisdiction is not dispositive, it is significant. See Certain Underwriters at Lloyd's London, et al v. Hartford Accident Indemnity Co., 16 AD3d 167 (1st Dept. 2005)holding that deference should be given to prior existing actions. Related, if not identical, issues have been litigated through the Ohio courts in connection with defense and indemnification coverage since 2000 and should not be transferred to New York Courts at this time. In 2001, Hon. Jed Rakoff noted that Ohio was the correct place to litigate these issues. See American Motorists Ins. Co., et al. v. The Glidden Co., et al., 00 Civ. 3787, 129 F.Supp.2d 640 (S.D.NY 2001). It is noteworthy that Glidden was dismissed from the Rhode Island action, which allegedly forms the underlying basis for the action here. The fact that Glidden may be held in on a public nuisance claim in some other case does not warrant an immediate determination here as to its indemnification rights.
With respect to the Claims against NL, this court previously held in OneBeacon America Ins. Co v. NL Inc. et al., Index No. 603429 (NY Co 2006) that coverage issues should remain in New York rather than be transferred to Texas because that action had been first filed in New York and that New York law clearly applied. For the reasons stated in that action, questions of Certain Underwriters' liability under NL's policies are best resolved in New York. Although litigating in New York and Ohio may result in inconsistent determinations concerning Certain Underwriters' liability coverage for the Rhode Island verdict claims, the policies issued to NL or its predecessor were issued in New York to what was then a New York Company.
With respect to the cross-claims, the issues are less clear. Various excess and other insurers claim that the appropriate forum for litigating their coverage issues is New York. AIG contends that the only policies it issued that are involved in the Glidden and Millennium claims were brokered and issued in New York to SCM Corporation, a New York Corporation. It appears that many of these companies issued excess insurance policies and were not involved in the prior Ohio litigation. Only one of the AIG defendants, Granite State Insurance Company is a first party defendant in any Ohio court, and that defendant has never answered a complaint. AIG invokes Reliance Ins. Co. v. American Elec Power Co., Inc., 224 AD2d 235, 637 NYS2d 710 (1st Dept. 1996) which held that it was not an abuse of discretion to not stay or dismiss an action pursuant to CPLR 3211(a)(4) or 327 where a similar claim was pending in a federal court in Ohio where the coverage issues and claims were not identical since the negotiation for and issuance of the policies were in New York. Thus it appears that determination of coverage under these policies may not be dependent upon determination of Certain Underwriters' coverage.
With respect to other cross-movants including Hartford Accident and Indemnity Company, First State Insurance Company, Twin City Fire Insurance Company, New England Insurance Company, and Nutmeg Insurance Company (collectively "Hartford") they too aver that New York is the center of gravity for coverage claims against them. They too argue that the vast majority of policies extending potetioal coverage to Millennium were negotiated and issued in New York. This was the result of Glidden's becoming an operating division of SCM in 1967 SCM having its principal place of business in New York. The policies issued following the Glidden-SCM merger from 1968-1986, according to the Ohio lower court ruling (reversed on appeal), would be governed by New York law. Based upon these arguments, it may not be prudent to dismiss the cross-claims of these insurers or other cross-movants at this time.
Conclusion
Based upon the foregoing analysis and for the foregoing reasons, the primary claims by Certain Underwriters are hereby dismissed as to Glidden, Millennium defendants, and Sherwin-Williams pursuant to CPLR §§ 3211(a)(4) and 327. Certain Underwrtiers' claims against NL Inc. shall remain in this court.
The cross claims by AIG, Travelers, Allstate, TIG, and Hartford shall remain at this time. However, these actions shall be stayed pursuant to CPLR § 3211 (a)(4) insofar as they affect the Glidden, Millennium, and Sherwin Williams claims, pending further proceedings by the Ohio court determining its role in evaluating coverage for the Rhode Island verdict and determination of primary coverage issues. If the Ohio court finds that any of these defendants are appropriately part of the Ohio action, the court will reconsider dismissal or a further stay at that time.
For the reasons set forth above, it is
ORDERED that plaintiffs' claims against Glidden, Millennium and Sherwin Williams are dismissed; and it is further
ORDERED that claims against NL, Inc. may go forward; and it is further
ORDERED that cross-claims against Glidden, Millennium and Sherwin-Williams by AIG, Travelers, Hartford, Allstate, TIG and any other excess insurers are hereby stayed pending further order of this court.
Parties are directed to appear for a preliminary conference on September 20, 2006 at which time the Court will seek clarification concerning which companies are primary carriers and which companies are excess insurers and will ask for a report on the progress of the Ohio litigation.